Germany has had a mortgage on the primo performance category for the entire six-year history of Drive's Car of the Year awards.

The country that produces more high-end sports cars than any other is the perennial pacesetter and 2012 is making a solid fight for the title.

Mercedes-Benz's awesome C63 AMG Coupe bludgeoned its way to last year's title with an awesome showing, courtesy largely of a mighty 6.2-litre V8 outputting 358kW and 600Nm.

A well-tuned seven-speed auto and a brash, characterful exhaust note quickly established the C63 as an early favourite, combining with an entertaining and firm but well-sorted ride to seal a win over BMW's fun but flighty 1-Series M Coupe.

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Also preparing to defend Germany's honour this year is Porsche, via the latest generation of its venerable 911 coupe.

The 911 Carrera S, fitted with the company's "PDK" seven-speed dual-clutch auto, can't match the C63's stellar output with its 3.8-litre flat six punching out 294kW and 440Nm.

The latest 911 is longer, wider and lower but also lighter than the model it replaces, with controversial new electro-mechanical steering that is sure to inspire plenty of talk in the judging room.

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With more absorbent suspension and a new roll stabilisation system, the latest generation of the 911 will bring benchmark dynamics to the table.

Like the 911, Nissan's GT-R has graced Drive's Car of the Year test track before. Unlike the 911 Turbo shortlisted two years ago, the GT-R wasn't eliminated because it was considered too expensive to win its category. In its last appearance – three years ago – it was instead seen as a track car par excellence, but ultimately too difficult to drive on the road every day due to its ultra-firm set-up.

Changes this year not only increased power to a stonking 404kW and sliced its 0-100km/h time to a claimed 2.9 seconds (it's a lofty claim and one we haven't been able to back up, but still impressive at 3.3 seconds as tested by Drive), but more supple suspension (at its softest setting) has added some much needed liveability.

There's still some driveline harshness evident, plenty of noise and a few in-cabin quirks, but the 2012 model is Nissan's most resolved GT-R to date and a serious chance to topple the reigning champion.

FPV's GT R-Spec brings some welcome local input to the big end of town, with the big Falcon-based brawler receiving a handling package that makes it a quicker car, if no more powerful.

Its 5.0-litre supercharged V8 still outputs 335kW and 570Nm, figures that usually monster everything else it lines up against including its HSV direct rivals, but make it only the third most powerful car here.

BMW's 135i was a three-time winner in this category and was retired last year in favour of the 1-Series M Coupe, which was faster but also more unpredictable, allowing the C63 to steal the coveted performance gong.

Now the Bavarian car maker has returned with the M135i, which brings similar fundamentals to the 135i coupe – short wheelbase, tight chassis, low weight – but packages it into a hatchback shape.

It's also more powerful than the 135i (235kW/450Nm) and faster, with a turbocharged inline six-cylinder engine sprinting to 100km/h in 4.9 seconds when teamed with an eight-speed auto.

After our first outing in the new M135i, we reckoned it could be up there for the buy of the year if you want a wolf in sheep's clothing. We'll have to wait and see how it copes against its more extroverted rivals.

In such a competitive segment and with such a star-studded field locked in, there were bound to be casualties.

Updates to Audi's RS5 and BMW's 6-Series produced improved cars, but weren't deemed to have moved ahead sufficiently to challenge the ballistic C63 carryover champion.